|Merchandise trade Balance - level||NZ$-300M||NZ$-433M||NZ$127M||NZ$110M|
|Exports - M/M percent change||-6.7%||-6.71%||-6.8%|
|Exports - Y/Y percent change||-4.9%||2.63%||2.4%|
|Imports - M/M percent change||6.3%||-2.0%||-1.9%|
|Imports - Y/Y percent change||-10.3%||-4.62%||-4.5%|
July merchandise trade deficit was NZ$433 million. Imports were up 6.3 percent on the month but dropped 10.3 percent when compared with the same month a year ago. Exports declined 6.7 percent on the month and 4.9 percent on the year.
Beef and lamb exports to key markets fell and cut into overall meat exports. Beef and lamb export values and quantities to the U.S. and the EU respectively declined. The United States and the EU are the largest export destinations for beef and lamb, respectively. The meat export declines were partly due to record meat exports this time last year.
Dairy exports also fell in July. Milk powder was lower but was partly offset by increases in butter and natural milk constituents. The fall in value of milk powder was price driven.
Crude oil imports into New Zealand fell by almost half in July, accounting for just over one-third of the $503 million fall in overall goods imports. The fall in crude oil came from both the falling global price of oil and a drop in the quantity imported.
The international trade balance measures the difference between imports and exports of both tangible goods and services. Imports may act as a drag on domestic growth and they may also increase competitive pressures on domestic producers. Exports boost domestic production. Trade balance values are calculated by deducting imports (cif) from exports (fob).
Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect the value of the NZ dollar in the foreign exchange market. Imports indicate demand for foreign goods in New Zealand. Exports show the demand for NZ goods in countries overseas. The currency can be sensitive to changes in the trade deficit run by New Zealand since this trade imbalance creates greater demand for foreign currencies. The bond market is also sensitive to the risk of importing inflation.